FCC Commissioner Says Court Ruling Represents Body Blow

Federal Communications Commissioner Michael Copps today described a courts decision to vacate network unbundling rules as a body blow to competitors and consumers. This is no way to be dealing with such a transformational technology, and I am alarmed about the impact it will have on consumers, small business and economic growth, he said during a keynote address before the 2004 ALTS Annual Conference in Washington.

In sharply-worded remarks, the commissioner expressed concern over the state of local competition. [We] have lost sight of the purpose of the 1996 Telecom Act, which was to give choices to consumers through better services and lower costs, Copps said.

He said there is a strong continuing need for regulation in an industry where 85 percent of local lines are still controlled by incumbents eight years after the passage of the 1996 Telecom Act. I recognize that the act was designed to be deregulatory in nature, but it is supposed to be a step-by-step process as competition takes hold. Deregulation is supposed to follow competition, not precede it, he said.

Copps spoke before a large, standing-room-only audience — one that ALTS President John Windhausen said far exceeded expectations — filled with representatives of competing local service providers. There is nothing like a full-blown emergency to get everyones attention, said one participant.

Indeed, there is little more than a month before FCC regulations are set to expire. Through legal appeals, direct negotiations, crafting of interim rules, or state regulatory involvement, affected industry parties are scrambling to find a short-term solution.

Copps described the current climate, created in the wake of the D.C .Circuit Courts March remand of the FCCs Triennial Review Order, as strange times, indeed. Copps also expressed concern over the impact the courts ruling has had on the ability of federal and state regulatory agencies to work together. This comes at a time when these working relationships seemed to have been improving, he added, as state PUCs worked closely with the FCC to implement the TRO.

Copps saw four industry priorities for the immediate future to help work through this period of uncertainty. The first was to seek a stay of the TRO remand order through an appeal to the Supreme Court. Copps already joined with two other FCC commissioners — Kevin Martin and Jonathan Adelstein — in pursuing that course. This is the shortest and surest route to certainty and reliability, he said.

Copps said that he also advocates direct negotiations between CLECs and ILECs in hopes of finding acceptable interconnection arrangements while the commission redrafts its TRO order. However, he said he sees worrisome trends as certain ILECs seem intent upon redefining the process of reaching interconnection agreements in order to keep the process behind closed doors. In the effort to keep documentation out of the public record, they have kept competitors, regulators and consumers all in the dark. The filing of interconnection agreements is the law, he added.

Copps raised the issue of intercarrier compensation where, he said, inaction within the regulatory community and the industry is benefiting no one. Our current system is Byzantine and broken, he said. The old system of patchwork compensation needs to be consigned to the ash can of history. He pointed out that the FCC has a three-year-old proceeding underway on this subject that needs to be completed.

Finally, in a nod to the stresses created when technological innovation meets regulation, Copps says redefining core communications as information services, and essentially moving from one regulatory classification to another adds to the instability and confusion."

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